This month, we examine the government's draft revised Money Laundering Regulations, troubling findings from the FCA's corporate finance review, and the latest edition of the NCA's SARs Reporter Booklet offering practical case studies for compliance teams.
Story 1: Draft Money Laundering Regulations Signal Practical Changes Ahead
The UK government has published draft amendments to the Money Laundering Regulations, setting the stage for significant refinements to the UK's AML framework. Expected to take effect in Q1 2026, these changes represent a genuine opportunity to align compliance requirements with risk-based principles whilst introducing welcome practical adjustments.
Further Embedding Risk-Based Approaches
The draft continues the shift towards proportionate, risk-focused compliance by refining Customer Due Diligence (CDD) triggers. Letting agents and art dealers will be aligned with other high-value dealers, creating consistency across similar risk profiles.
Perhaps most practically significant is the provision for bank insolvency situations. Under the proposed changes, customers may be onboarded by a takeover firm with identity verification conducted post-transfer, subject to safeguards including FCA notification. This flexibility recognises operational realities whilst maintaining appropriate oversight. Importantly, this doesn't apply to high-risk customers.
Refining Enhanced Due Diligence Requirements
The draft narrows Enhanced Due Diligence (EDD) requirements for high-risk third countries, moving from the broader Financial Action Task Force (FATF) "increased monitoring" jurisdictions to focus specifically on "call for action" countries. This refinement targets resources towards the highest-risk relationships whilst reducing burden on lower-risk cross-border activity.
The regulations also reword transaction monitoring triggers from "complex or unusually large" to "unusually complex or unusually large" transactions. This seemingly minor change clarifies that assessment should be relative to typical behaviour for the sector or nature of the transaction, providing clearer guidance for compliance teams applying judgement in practice.
Strengthening Institutional Cooperation
The amendments enhance cooperation and information sharing between AML supervisors and public bodies, now including Companies House. This expanded framework recognises that effective financial crime prevention requires coordination across multiple agencies with complementary oversight responsibilities.
Practical Currency Alignment
The regulations update reporting thresholds, converting euro amounts to pounds sterling and aligning with international standards. Whilst technical, this change removes unnecessary complexity from daily compliance operations.
What Financial Institutions Should Do Now
Once finalised, it's important that firms take these changes as a prompt to review their Enterprise-Wide Risk Assessments (EWRAs), policies, procedures and training. The regulations are expected in Q1 2026.
Story 2: FCA Review Exposes Financial Crime Control Gaps in Corporate Finance
The FCA has published findings from its review of financial crime compliance in corporate finance firms, revealing that two-thirds of firms may be non-compliant with AML requirements.
The Concerning Findings
The review uncovered several troubling deficiencies:
- 10% of firms stated they did not retain evidence of customer due diligence.
- 29% of principal firms reported they do not complete financial crime risk assessments for their appointed representatives, creating blind spots in their oversight frameworks.
- 6% of principal firms acknowledged they do not monitor their appointed representatives' compliance with financial crime regulations during on-site visits or audits.
Looking Beyond Corporate Finance
Whilst this review targets corporate finance specifically, the themes in the findings can translate across many financial services firms, so it's well worth a read and consideration of whether these findings could apply in your firm.
Story 3: NCA's SARs Reporter Booklet Brings Compliance to Life
The National Crime Agency has published the latest edition of its SARs Reporter Booklet. This is one of the most useful publications for financial crime professionals, as it includes all sorts of case studies which are really valuable.
There's nothing like a case study to bring AML training to life, and these scenarios should also prompt firms to consider their own vulnerabilities and make sure they have appropriate controls in place. Think customer and transaction monitoring scenarios: if your firm offers products and services which could feature in these case studies, then do you already have appropriate monitoring in place? If not, look at your rules and amend accordingly.
Key Takeaways for Financial Crime Professionals
November's developments highlight several critical themes:
- Regulatory Evolution Continues: The draft Money Laundering Regulations demonstrate commitment to proportionate, risk-based approaches whilst maintaining robust safeguards. Once finalised, firms should take these changes as a prompt to review their EWRAs, policies, procedures and training.
- Basic Compliance Still Challenges Many: The FCA's corporate finance review reveals that fundamental requirements continue to trip up significant numbers of firms. Excellence in financial crime prevention starts with getting the basics right consistently.
- Practical Intelligence Drives Effectiveness: The SARs Reporter Booklet demonstrates how real-world case studies strengthen detection capabilities and team training. Combining regulatory knowledge with operational intelligence creates more effective compliance programmes.
These developments underscore that effective financial crime prevention requires both strong frameworks and continuous refinement. Regulatory changes, enforcement findings, and intelligence resources all contribute to strengthening capabilities when approached systematically.
Fraud Awareness Week 2025
16th-22nd November marks Fraud Awareness Week, bringing consumer awareness initiatives across the UK. The campaign highlights the scale of fraud affecting individuals and businesses whilst promoting practical protective measures. Next month's edition will reflect on the campaign's impact and emerging themes from this year's awareness activities.
This blog is based on the November 2025 episode of The FinCrime Connection UK, hosted by Claire and Phil from Jade ThirdEye. Claire brings extensive expertise in financial crime prevention as Global Financial Crime Regulatory Specialist, whilst Phil serves as Business Development Manager for Jade ThirdEye in the UK, helping organisations navigate complex regulatory landscapes.